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tv   Today in Washington  CSPAN  July 25, 2012 6:00am-7:00am EDT

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lost friday morning, jonathan t.bluyk, alexander j.boik, jesse childress, jays could ghawi, michaela medek, matthew m mcquinn, john larimer, alex sullivan, alexander teves, rebecca wingo, and i think the hardest name for all of us to say, that of 6-year-old veronica moser-sullivan. i think the presiding officer has seen the photo of her with an ice cream cone in hand, delight on her face, ice cream on her nose. and i guess maybe what we could do is each take the time to
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enjoy an ice cream cone, maybe leave that ice cream on our nose for a little bit and remember her. in honor of these victims, i filed a congressional resoluti resolution, senate congressional resolution 53, along with my colleague, the presiding officer, senator bennet. congressmaan identical resolutin filed in the u.s. house of representatives and the resolution among many things strongly condemns the atrocities which occurred in aurora, offers condolences to the families' friends and loved ones of those killed in the attack and expresses hope for the rapid and complete recovery of the wounded. applauds the hard work and dedication exhibited by the hundreds of local, state, and federal officials, and others who offered their support and assistance. and last but certainly not
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least, it honors th the resiliee of the city and the state of colorado in the face of such adversity. i ask all of my colleagues in thinsenate to support aurora and support this resolution. as we pay tribute to our fallen fellow americans and the heroes around them, here's what i hope can come out of what can only be described as a senseless tragedy. can we harness the sense of community we feel this week and use it to create a lasting sense of collaboration in america? and use it to solve our shared challenges in a measured, respectful, and thoughtful way? we can truly learn from those who selflessly gave of themselves during the chaos of the aurora shootings. and draw from it the strength, a
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better people, better family members, and, yes, even better legislators. in rowman mythology, aurora is the goddess of dong. at dawn on friday, the chaos and the pain and the tragedy of the night before still lingered over that wonderful city of aurora. but by dawn on the second day, the signs of heroism, of recovery, and of community began to shine through the darkness of the great colorado city called aurora. as each dawn signals a new day, we owe it to the victims to rise to the occasion and renew our commitment to make this a better, stronger, and more perfect nation. thank you, mr. president.ent.
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i'd ask the quorum call be vitiated. the presiding officer: without objection. mr. bennet: thank you, mr. president. i'd like to first thank my friend -- and i don't mean that in the political sense, i mean in the real sense -- the senior senator from colorado, the presiding officer, for his incredibly thoughtful remarks about the tragedy last week in colorado. and i can't think of any more fitting place to be than here with you tonight to have this conversation. so thank you very much for your words. mr. just a few dark moments last week in aurora, colorado, 12 innocent lives were taken from us, 12 people full of life and aspirations, loved by family and friends, and now 12 people remembered by an entire nation. as the presiding officer said, thousands of coloradans attended a vigil hosted by the city of aurora on sunday evening.
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we shared tears and prayers. we -- we also resolved to support one another, to heal and to always remember those who lost their lives on july 20, 2012. and it's for that purpose that the presiding officer and i come to the floor this evening. first is jonathan blunk, age 26. jon was a father of two who moved to colorado in 2009 after three tours in the persian gulf, the north arabian sea for the u.s. navy. he was a certified firefighter and e.m.t. jon lost his life protecting his friend, jansen young, from the gunman's line of fire. jon shield her from gunfire by pushing her to the ground while shots were fired. he was supposed to fly on saturday to nevada to see his
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wife, chantal blunk, and his four-year-old daughter and two-year-old son. instead, his wife had to put up the dress her daughter had picked out to wear to the airport. she told her daughter that they wouldn't see their dad anymore but that he would still love them and look over them. his daughter, hayley, is comforted by calling her fathe father's cell phone and hearing him on voicemail. this is a.j. boik, alexander boik. age 18. a.j. recently graduated from gateway high school. he enjoyed baseball, music and making pottery. a.j. was to start art classes at the rocky mountain college of art and design in the fall. he was described -- quote -- "as being the life of the party. a.j. could bring a smile to
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anybody's face." he was a young man with a warm and loving heart. this is jesse childress. age 29. jesse was an air force cyber systems operator based at buckley air force base. he loved to play flag football, softball and bowl. he was a devoted fan of the denver broncos, for which he secured season tickets. and he was described by his superior officer as an invaluable part of the 310th family who touched everyone he worked with. this is gordon cowden, age 51. gordon was originally from texas and lived in aurora with his family. he was -- quote -- "a
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quit-witted world traveler with a keen sense of humor." he will are remembered for his devotion to his children and for always trying to do the right thing, no matter the obstacle. gordon took his two teenaged children to the theater the night of the shooting, both of whom thankfully made it out unharmed. >> this is jessica ghawi, age 24. jessica was an aspiring journalist, most recently interning with mile high sports radio in denver and went by the nickname redfield. she was hard working and ambitious with a generous spirit and kind heart. when numerous homes were recently destroyed by colorado wildfires, ghawi decided to start collecting hockey equipment to donate to the kids affected because she wanted to help.
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>> thithis is john thomas layer. she was a cryptological technician also at buckley. a job which requires "exceptional good comarkt and skills." originally from chicago, he was the youngest of five children and joined the service just over a year ago, like his father and grandfather. john chose to serve in the u.s. navy. john's superior officer called him -- quote -- "an outstanding shipmate, a valued member of the navy and an extremely dedicated sailor. colleagues were drawn to his calming demeanor and exceptional work ethic. he was also known as an extremely competent professional. here's matthew, matthew mcquinn, age 27. matt died while protecting his girlfriend, samantha sw yowler,
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by jumping in front of her during the shooting. matt and samantha moved to colorado from ohio last fall and worked at targ he. and he samantha were very much in love and planning their life together. because of matt's bravery, samantha was only wounded in the knee and is expected to make a full recovery. this is cayla, micayla medek, age 23. cayla was a gradual of william c. hinckley high school in aurora and a resident of westminster. she worked at subway and was a huge green bay packers fan. cayla would plan weekend activities around watching the games with her brother and father. she is remembered as a loving and gentle young woman.
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this is veronica moser-sullivan, age six. veronica had just learned to swim and attended holly ridge elementary school in denver, colorado. she was a good student who loved to play dress-up and read. veronica's mother, ashley moser, remains in critical condition at aurora medical center. she was shot in the neck and abdomen. we pray for ashley's recovery and strength and working through the passing of her daughter, veronica. alex sullivan, age 27. alex was at the movies celebrating his 27th birthday and first wedding anniversary. he loved comic books, the new york mets and movies.
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alex was such a big movie fan that he took jobs at theaters just to see the movies. alex stood 6'4" and weighed about 280 pounds. he played football and wrestled before graduating high school in 2003 and later went to culinary school. alex was known as a gentle giant and loved by many. this is alexander teves, age 246789 alex received an m.a. in counseling psychology from the university of denver in june and was planning on becoming a psychiatrist. he also competed in the tough mudder, an intense endurance challenge, and helped students with special needs. alex was at the theater on the night of the shooting with his girlfriend, amanda winger, when the gunman opened fire and he immediately lunged to block amanda from the gunfire, held
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her down and covered her head. this is rebecca wingo, age 32. rebecca, originally from texas and a resident of o aurora, joid the air force after high school, where she became fliewntd in fln mandarin chinese and served as a translator. she was the single mother of two girls and worked as a customer relations representative at a mobile medical engine company. rebecca was also enrolled in the community college of aurora since fall 2009 and had been working toward an associate of arts degree. she was known to family and friends as a gentle -- as -- quote -- "a gentle, sweet and beautiful soul." mr. president, here is a photo of the gathering that we had
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last sunday night in aurora. i believe, like you, mr. president, that the early morning hours of july 20, 2012, will not be remembered for the evil that happened. scripture tells us -- quote -- "not to be overcome by evil but overcome evil with good." that's what the people of aurora and colorado have been doing since the first moment of this tragedy, and that is what we'll continue to do. in time, we'll not remember the -- the morning of july 2 20th for the evil that killed 12 innocent and precious people. instead, we'll remember the bright lives of those we lost and the families they leave behind. we'll remember the 58 wounded
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survivors whose recovery bears witness to humanity's strength and resolve. and tonight, knowing that some are still in critical condition, we pray for their recovery. we'll remember the heroic acts of everyday citizens, our first responders and medical personnel that saved lives that otherwise surely would have been lost. we'll remember the continuing generosity of those coloradans and americans who donated blood in record numbers and raising funds to support the families in this trying time. and in time, because we are all aurora, we'll draw strength from the example set by one great american city and the faith of her people in one another. thank you, mr. president. i yield the floor.
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minutes. the presiding officer: without objection. mr. brown: madam president, i rise today to speak about the need to extend middle-class tax cuts. we have a broad bipartisan consensus that middle-class families should not see their tax increases -- that their taxes increase on january 1. we know if congress does nothing, then taxes will increase for a whole lot of americans, for the broad middle class on that date.
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we have a broad bipartisan consensus that that should not happen. so we have this moment of agreement. we should act swiftly to extend tax cuts for 98% of american families -- tubal actually act % of people in my state. but we won't. because special interests and their allies in congress are holding this hostage. why? it's the same old song, in order to protect billionaires and millionaires. it seems that the default button for so many people in this institution, certainly the majority in the house of representatives and far too many in the senate, is no matter what, you protect the interests of millionaires and protect the interests of billionaires. let's be clear, regardless of whose plan becomes law, whether it's our plan, where we immediately, today, this week, as soon as possible, whether we immediately grant tax relief for that -- for people that are middle class, that -- in he is
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every american will get a tax cut on their first $250,000 of income f. you're making a million dollars a year, you still get a tax break on your first -- a tax cut on your first $200,000. if you make $10 million a year, you still get your taxes cut on the first $250,000. you're only paying roughly 4% on every dollar above $250,000. so we have bipartisan agreement. let's lock that in, that the middle class will get a tax cut. there's a -- there's an old cliche that that definition of insanity is doing the same thing over and over and expecting different results. we've been in this -- we've been in this policy shop before, when they sold us the same flawed economic policies based upon tax cuts for the wealthy trickling down to the middle class. i was in the house of representatives in the first part of the last decade when president bush came to us. we had a huge budget surplus, if you remember those days, a huge budget surplus. in fact, in 2001, we had the largest budget surplus in american history.
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surplus, not deficit. look what we're dealing with now. so what happened? we went -- two wars, iraq and afghanistan. bad idea to go into iraq. contentious issue, the intelligence wasn't really right that the congress was given. many of us voted against it. but put that aside, nobody paid for that war in iraq. then there was the tax cuts that went overwhelmingly to the wealthiest people in our society. nobody paid for those tax cuts. then there was the medicare partial privatization prescription drug bill. nobody paid for that. so we went from the biggest budget surplus in american history to the biggest budget deficit. at the same time, the economic geniuses of the time that were running government said if you cut taxes on the rich, they really -- they didn't use the term trickle down, but that's what it is. if you cut taxes on the richest in the country, all that wealth will trickle down to the middle class and poor and everybody will get richer and the economy will take off. we had eight years of that experiment. but you know what happened, madam president? twoan 2000 and 2010, we lost in
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this country 5, million manufacturing jobs. under those economic policies of give huge tax breaks for the rich -- that was the policy, the fundamental tenet, central core of that policy is huge tax cuts for the rich. what happened? we lost a third of our manufacturing jobs. it's only since we've begun to bring some more fairness with the recovery act, with wall street reform, with some other things we've done, with the auto rescue, especially important in my state, did we see the economy grow. from 2010 -- the unemployment rate in my state in 2009 was 10.6%. now it's 7.3%. that's not good enough but it's certainly progress. 5 million manufacturing jobs lost between 2000-2010. since 2010, almost every single month we've gained manufacturing jobs. in the aggregate, some 450,000 to 500,000 manufacturing jobs. so, clearly, this policy of cutting taxes on the wealthy is going to create prosperity. it just didn't work that way. went from -- as is, we went from a surplus at the end of the
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clinton years to massive deficits at the enof th end of h years. so let's be clear. we're talking about returning the tax rates for the top 2% of americans to their 1993 level, the same year that president clinton balanced the budget. opposition to our bill to extend the middle-class tax cuts say if millionaires have to pay the same marginal tax rate that they did in the clinton years, then job creation will suffer. but it doesn't make sense. again, the clinton years, we want to go back to the tax rates for the richest people in our country to what they were under president clinton. during that eight years, 22 million increased jobs in this country. the bush years, with low tax rates for the rich, we lost 5 million manufacturing jobs and had absolutely anemic economic growth. it just -- make the compare son. you don't have to be an economist to make this comparison. you look at tax rate during those years, he look at tax rates during the eight years of the bush years. the clinton years and the bush years. and i don't want to go back. i don't want to blame everything on president bush. that doesn't get us anywhere.
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it makes people quit listening. but i do want to learn from history. and i look at the tax system we had during the clinton years and the tax system we had during the bush years and make the contrast about what happened. 22 million jobs created. not so good during the bush years with almost -- with very anemic job creation. far too many people in my home -- for too many people in my home state, the recession meant that they had to delay -- the recession didn't mean they had to delay buying a new yacht. workers -- workers in steubenville and norwood and norwalk were struggling to stay afloat. they struggled to make ends meet. too many are still struggling. struggling. that's why we want a responsibility, mr. president, to the people in new hampshire and all over to pass the middle class tax act of 2012. madam president, the median household income in ohio is $47.358. for those families, a $2,000 tax cuts means a whole lot. we know that 98% of americans who would benefit from this tax cut are going to put that money
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back into the economy. this isn't trickle down. this is you get a tax cut like that and you put money into th the -- you buy -- maybe you can put a down payment on a car. maybe you can help pay your son or daughter's way to community college. maybe you can do some remodeling in your house. maybe you can just do some things around the house that you need to do or take your kids to a move oh or go out to dirnt once in awhile. but that -- dinner once in awhile. but that $2,000 t 2,000 really s meens a lot to aa family whose income is $-- but that $2,000 really means a lot to a family whose income is $47,000. the middle class society has been beat up lore enough. folong enough. where wages have been stagnant and people haven't had the opportunity to do what we need to do to build this great country. madam president, i ask my colleagues to support this legislation. and i yield. 123450 mr. whitehouse:
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madam president? the presiding officer: the senator from rhode island. mr. whitehouse: madam president, may i first ask unanimous consent that for the duration of today's session, varun jane, who is a fellow in my office, be granted floor privileges. the presiding officer: without objection. mr. whitehouse: thank you. tomorrow, madam president, we will have the opportunity to deliver a little bit of tax certainty to the american people by advancing the middle class tax cut act. this legislation would prevent tax rates from increasing for the vast majority of american families and would preserve an important tax credit that currently helps millions of students and families avoid th the -- afford the costs of a higher education. this middle-class tax cuts act is the right thing to do for the middle class and i intend to vote for it. the question is: will it be filibustered? a tax cut for millions of hardworking americans
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filibustered simply to protect the wealthiest americans from paying a fair share. we will find out. this is not a new story. in 2001, when president george w. bush decided to spend a large portion of the surpluses he inherited from president clinton to cut tax rates across the board, many democrats opposed it because the tax cuts were unfairly waited towards the highest-income americans. as a result of this opposition, republicans were forced to set the tax cuts to expire at the end of 2010. as 2010 drew to a close, president obama and many democrats in congress, including myself, supported extending the tax cuts for middle-class families but letting the lower rates on income above $200,000 for an individual and $250,000 for a family revert to the clinton-era levels, as was
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scheduled. senate republicans filibustered that effort, refusing to allow the middle class tax cut without a tax cut for america's wealthiest. not wanting tax rates to go up on middle-class families still struggling during the economy. the president and senate democrats reluctantly agreed to extend all of the tax cuts through this year. which brings us to now. once again these tax rates are set to expire. i would like to keep rates low for middle-class families. those families in rhode island are still struggling in the aftermath of the mortgage meltdown on wall street. and this is not the time to raise their taxes. but i agree with president obama that for reasons of fairness and to begin to address our deficit, it would be wise not to extend
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the bush tax cuts for high levels of income. and bear in mind in this discussion that the middle-class tax cut act actually would benefit even high-ends taxpayers. when we protect the first $250,000 in income, it's the first $250,000 for somebody making a million dollars. it's not just the first $250,000 for a family that makes $100,000 or $185,000. if you make $100 million or $185 million, you still get the first $250,000. if your family, for instance, makes $255,000, you'd only see an increase on the $5,000 and only to the clinton era rates that were in effect during the 1990's, when our economy was thriving. a family earning $255,000 would pay an extra $150 as a result of this bill. extending the lower tax rates
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for income above $250,000 for one year, again as the republicans have proposed, would add over $49 billion to our deficit. even in washington, $49 billion is significant money, money that would have to be borrowed, adding to our deficit problem. now, many of the same republicans who voted in the name of deficit reduction to end medicare as we know it -- deficit reduction was so important to them that they voted in that ryan budget to end medicare as we know it, to put thousands of dollars in costs on our seniors, they would support deepening the deficit with high-end tax cuts. there is a double standard here, and for most rhode islanders, these are exactly the wrong priorities when it comes to deficit reduction. in addition to the deficit
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concerns, we should let the tax cuts at the top expire just for fairness reasons. loopholes and special provisions allow many super high income earners to pay lower tax rates than many middle-class families. according to the nonpartisan congressional research service, 65% of individuals earning $1 million or more annually pay taxes at a lower rate than median income taxpayers making $100,000 or less. let me say that again so it sinks in. 65%, two-thirds nearly, of individuals earning a million dollars or more a year, the vast majority of individuals earning a million dollars or more annually, pay taxes at a lower
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rate than median income tax taxpayers making $100,000 or less. because of the loopholes, because of what the special interests have done, our supposedly progressive tax system is upside-down to the point where 65% of over million dollar earners pay a lower tax rate than the median income taxpayer making $100,000 or less. as you know, madam president, earlier this year, we voted on my paying a fair share act, legislation that would implement the so-called buffett rule and ensure that multimillion-dollar earners paid at least a 30% overall effective federal tax rate. during debate on my buffett rule bill, i cited an i.r.s. statistic that the top 400 taxpayers in america in 2008 who earned an average of $270 million apiece, they each
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earned on average $270 million in that one year, and they paid the same 18.2% effective tax rate on average that's paid by a truck driver in providence, rhode island. the single biggest factor driving this inequality is the special low rate for capital gains, 15% under the bush tax cuts. the special capital gains rate allows hedge fund billionaires to avail themselves of that so-called carried interest loophole and pay taxes at lower rates than their doorman, their secretaries, their chauffeurs. if we let the tax cuts at the top expire, these rates revert to 20% instead of 15%. now, 20% is still a pretty low rate for someone making $100 million a year, but it's more like what a family making $100,000 a year pays.
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let's also be very clear about one more thing. the proposal that republicans prefer, the tax cut bill introduced by finance committee ranking member orrin hatch would raise taxes. it would raise taxes on 25 million lower and middle-class americans. it would raise taxes on those 25 million americans still struggling in these challenging economic times. republicans claim not to want to raise taxes, but the republican tax bill would let very popular lower and middle-class provisions expire that would cost 25 million americans an average of $1,000 each. under the republican bill, 12 million families would see an end to the -- a smaller child
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tax credit. 6 million families would lose their earned income tax credit. and 11 million families would lose their american opportunity tax credit, which helps pay for college, provides a 2,500-dollar tax credit for higher education. that popular tax credit has already helped millions of students and their parents pay for college, along with pell grants, another subject of republican attack. extending the american opportunity credit, the college tax credit, through 2013 would cost about $3.2 billion. so republicans believe that we cannot afford a $3.2 billion investment in higher education
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for middle-class americans, but we can afford $49 billion in continued tax cuts for ultrahigh income earners. a $2,500 tax credit might seem pretty small in comparison to the $92,000 average tax break that millionaires, people earning a million dollars a year, would receive from another year of high-end tax cuts, but that $2,500 may make a much bigger difference in the life of that middle-class family with that child trying to get into a college they can afford than that $92,000 would make in the life of somebody earning well over a million dollars a year. once again, madam president, look at the priorities here.
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republicans fought to protect the tax loopholes and taxpayer subsidies for big oil. they have fought to protect the carried interest tax loophole that lets hedge fund billionaires pay lower tax rates than their chauffeurs and doormen, and they want to go after the child tax credit. they want to go after the earned income tax credit. they want to go after the college tuition tax credit. that is priorities that, like our tax code for too many americans, are upside-down. i hope the republicans will join us tomorrow in voting to advance a measure that would keep taxes low for the vast majority of americans, and i urge them to reexamine their proposal to raise taxes on 25 million low
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and middle-class americans. i thank the chair, and i yield the floor. mr. levin: mr. president? the presiding officer: the senator from michigan. mr. levin: madam president, many of our republican colleagues argue that we cannot extend tax relief for middle-class families unless we also extend tax cuts for the wealthiest. they argue that without tax cuts for that wealthiest 2%, we will harm job creators and slow the economy. their arguments rely on faulty assumptions, mistaken beliefs and misleading statements, and let's get to the facts. it is a fact that every american taxpayer would receive a tax cut under our bill on the first $250,000 of their income. it is a fact that compared to the middle-class tax cut act now before us, the plan that the republicans have put forward would increase the deficit by $155 billion. it is a fact that the bill
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republicans have put forward, despite their professed support for tax cuts, would raise taxes on the middle class by failing to extend the 2009 tax cuts for middle-class families, including the american opportunity tax credit and credits that help families with children. now, madam president, what's unfolding on the senate floor now is the culmination of a rigid republican adherence to tax cuts for the wealthy as the supreme goal of public policy. republicans have demonstrated a willingness to risk government showdowns, shutdowns. they have demonstrated a willingness to risk grave economic damage, to risk rising taxes on the vast majority of americans in pursuit of their highest priority, lower taxes on the wealthiest 2% of us. they want to risk all of that in service to an idea that has
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already proved a failure. when historians look back at the republican dedication to tax cuts for the wealthy, they will find it remarkable that so many fought so long and so hard to go back to a failed policy. income for the typical american family peaked in the year 2000. not coincidentally just before the republican tax cuts for the wealthy mania reached its zenith. a june study by the federal reserve found that the average middle-class families' net worth had fallen by 40% from 2007 to 2010, and in 2010, the bottom 99% of income earners reaped just 7% of total income growth while 93% of all growth flowed to the top 1%.
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as david leonhart of the "new york times" reported on monday -- quote -- the top earning 1% of households now bring home about 20% of total income, up from less than 10% 40 years ago." he continued -- "the top earning 1/10000 of households, each earning at least $7.8 million a year, many of them working in finance, bring home almost 5% of the nation's income, up from 1% 40 years ago." close quote. now, perhaps this vast accumulation of wealth would arguably be acceptable if it had resulted in faster economic growth, if it had produced new jobs and helped average americans prosper. indeed, since the time of president reagan, america has been told that the rising tide lifting up the wealthy would lift all boats, that the
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benefits would trickle down to all americans, and our republican colleagues today argue that we must continue the president bush tax cuts for the wealthy or risk harm to the -- quote -- "job creators." but the republican emphasis on policies that are more and more generous to the wealthiest has utterly failed to spark economic growth or create the jobs that we need. their experiment failed. the bush tax cuts coincided with the slowest rate of job growth in american history. economic growth even before the financial crisis nearly sent our economy into depression was woefully short by historic standards. the failure of the bush policies to spur economic growth and job creation underlies the failure of another promise from supporters of tax cuts for the wealthy. the promise that those cuts
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would pay for themselves. republicans backing the tax cuts of 2001 and 2003 painted those grand scenarios of growth so rapid that it would yield increased tax revenue, but instead of growing federal coffers, we got a flood of red ink. so the policy of tax cuts for the wealthy failed as a fiscal policy. it added to our deficit. it failed as an economic policy, coinciding with weak growth and economic output and job creation, and it failed as a vital test of public policy in a democratic society because it failed the fairness test. instead, it facilitated massive accumulations of wealth for a fortunate few while most americans have struggled just to trim. yet our republican colleagues persist in their pursuit of the
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failed policy, persist in fact to the point that they are willing to force a tax increase on more than 90% of taxpayers to potentially send their economy tumbling back into recession in adherence to that failed policy. madam president, we're not arguing against this policy of tax cuts for the wealthiest because we seek to denigrate success for class waffle as the public has alleged. we are arguing against these policies because they are broken, they have failed, they are unfair. we should reject them lest they do even more harm. we should reject the republican pursuit of tax cuts for the wealthy at all costs. every other consideration be damned. we should allow middle-class families to keep a few of their hard, on the other-earned dollae middle class tax cut act. we should at a minimum vote tomorrow to overcome the
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filibuster threat and to move to proceed to debate this singularly important issue. and, represent -- you one plan introduced by majority leader reid and supported by senate democrats and the president proposes higher taxes on american entrepreneurs, investors, and small business owners the democratic plan represents the philosophy that if only the government could raise enough money that congress could somehow spend our way to prosperity. it is a viewpoint that holds that the federal government can
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spend hardworking american tax dollars better than they can. rather than leaving the money in the private economy where it can be invested or spent by private citizens, this view holds that the government should instead bring these dollars here to washington, d.c., to redistribute them through the federal bureaucracy. this philosophy was probably best articulated by the president recently when he said, and i quote, "if you got a business, you didn't build that; someone else made that happen." end quote. in other words, nobody is extraordinary bring by virtue of thr hard work and accomplishments. when someone works hard and succeeds, we shouldn't celebrate that person as an example. we should instead take from him or her in order, as the president said, to spread the wealth -- to quote another of his lines. i am hopeful that the tax-and-spend philosophy of the reid tax plan will not be our
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only oftentimes i hope that we'll have the opportunity to vote on legislation introduced by senator hatch and minority leader mcconnell. this plan takes a very different approach by following the view that now is not the time to raise anyone's taxes. this view holds that our american freeent price system works best when government gets out of the way, leaving americans free to pursue their hopes and dreams. one way that we can leave americans free to pursue their dreams is by not raising their taxes next year, and we especially shouldn't raise taxes when americans are struggling to get by. ironically, the view that we should extend current tax policy at a time when the economy is weak was articulated interestingly enough by the president just two years ago when he signed and extension of all the tax rates. at that time, president obama said that raising taxes would have been a blow to our economy just as we're climbing out after recession.
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well, interestingly enough, at that time real g.d.p. growth when he made that statement, when that tax rate extension was signed into law, was around 3.1%. that was the average when the president made the statement that if we raise taxes it would be a blow to our economy. well, real g.d.p. growth this year is on a pace to average around 2% and possibly less. those numbers consistently are being revised and being revised downward. if it didn't make sense to raise taxes when our economy was recovering, why does it make sense now to raise taxes as our economy is slowing? how does it make sense to raise taxes in an environment where over 23 million americans are out of work or underemployed when the unemployment rate has been stuck over 8% now for 41 consecutive months? the votes tomorrow are incredibly important. not because either plan is likely to become law immediately
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but because americans deserve to know where their senators stand when they go to vote this november. do you stand for stable tax rates that encourage work and investment? or do you stand for increasing taxes on the very businesses we rely on for job creation? do you stand for a free enterprise system that rewards hard work and innovation? or do you stand for making it more difficult for small businesses to grow and succeed? mr. president, these are the important choices that they will have -- that will have real impact on hardwor hardworking as and on our economy at large. consider the reid tax plan. according to the committee -- joint committee on taxation, this plan will close a tax increase on nearly a million business owners. nearly a million business owners. now, proponents of this increase are going to argue that it will only affect a small segment of our economy. and yet the joint tax committee
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estimates that the tax increases in the reid plan will hit more than 50% of all income earned by businesses that pay their taxes at individual rates. these are called pass-thru businesses and they apply to "s" corporations, partnerships, sole proprietorships and l.l.c.'s. they are the ones that will see their cost business go up next year for no other reason that are to tax the rich. small businesses which accounted for two-thirds of all the taxes over the last decade will be particularly impacted. according to a survey of small businesses by the national federation of independent business, 75% beaver of small businesses are organized as pass-thru businesses. nfib also found that the businesses most likely to be hit are those businesses employing between 020 and 250 employees. according to the u.s. census,
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the data that they collect, these businesses employ more than 25% of the workforce. and so the million small businesses that according to the joint committee on taxation will see their taxes go up under this proposal employ 25% of the american workforce and account for over 50% of all pass-thru income. and so you're going to see taxes go up -- taxes go up dramatically on over 50% of pass-thru income and on small businesses that employ 25% of the american workforce. now, does that make sense in this economy? it should be no wonder that the political party advocating this kind of tax policy has also presided over the weakest economic recovery literally since the end of world war ii. the impact of the reid tax increases on small businesses will be bad enough, but unfortunately these tax increases will have significant
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ramifications for our entire economy. according to a study released earlier this month by ernst & young be, the reid tax plan would hurt our economy in the long term. according to ernst & young, the tax increases in the reid pl would reduce economic output by 1.3%. this would mean $200 billion less in economic activity if translated into today's economy. the ernst & young study indicates that the tax policy in the reid plan would reduce employment by half a percent. meaning roughly 710,000 fewer jobs. the study estimates that the senate democrat approach will reduce the nation's capital stock by 1.4% and ivestment by 2.4% and that this approach will reduce after-tax wages by 1.8%.e investment, you're going to cost the economy over 700,000 jobs, you're going to reduce after-tax wages for hardworking americans
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in this country and yet here we are talking about a tax increase that would do dangerous, dangerous damage and harm to our economy. and i would say, mr. president, these aren't partisan statistics compiled by senate republicans. these are the estimates by a respected accounting firm as to what will happen if we follow the tax policies proposed by senate democrats and the president. we'll have less economic growth, fewer jobs, and a lower standard of living in the long run. these numbers simply confirm common sense. if we want individuals and businesses to spend and invest more, we shouldn't raise the amount of their income -- the amount of their income that they have to pay to the federal government. and that's what this does. we have major tax policy decisions to make, decisions reflected in the votes that we're going to take tomorrow. do we want to encourage capital formation in this country? in other words, do we want to encourage investors to put their capital at risk so that
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businesses will have money to make new investments? well, by raising the capital gains tax rate from 15% to 20% for some investors, the reid bill will make it less attractive to invest in our economy. according to an ernst and young study from february of this year, the top rate of capital gains will rise to 56.7% on january 1 of next year after taking into account corporate, investor and state taxes. this will be the second highest combined capital gains tax rate in the world among oecd and brick nations. america already has the highest corporate tax rate in the developed world. it appears as if the senate democrats are going for number one when it comes to capital gains taxes as well. if there is anything i can say that's positive about the democrats' tax increase plan, it is at least that they rejected the president's proposal to nearly triple the tax on dividends paid by upper-income
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americans. even senate democrats are not shy about raising taxes, understand that the president's proposal to impose a top rate of over 40% on dividend income will be terrible for millions of seniors who rely on dividends -- for dividend paying stocks and for those american companies that rely on dividends to raise capital. instead, the reid bill would increase the top rate on dividends from 15% to 20%. now, i believe this tax increase is bad policy but it won't be nearly as harmful as the president's approach would have been. on another issue of critical importance, however, the senate democrats have decided to run to the left of this liberal administration and this is on the issue of the estate tax, better known as the death tax. the reid plan would impose a huge new death tax on family farms and businesses next year. under current law, businesses and farms are exempted from the death tax on the first $5 million of the value of an estate. values above this amount are
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taxed a top rate of 35%. well, i believe we ought to completely eliminate the death tax and i've introduced legislation with 37 of my colleagues to do so. but the current death tax treatment exempts the large majority of family farms and businesses from the tax. the reid plan, however, would allow the death tax to revert to the provisions in effect before 2001. this means that under the reid plan, family farms and businesses will face a top death tax rate of 55% on estates above $1 million in value. this is a massive death tax increase on tens of thousands of small businesses and family farms across america. in fact, according to the joint committee on taxation, the reid plan will increase the number of estates subject to the death tax in 2013 from 3,600 estates under current law to 50,300 estates under reid's proposal.
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according to the joint committee on taxation, the reid plan will subject 20 times more farming estates to the death tax in 20 2013, a 2,000% increase. the reid plan will subject nine times more small businesses to the death tax, a 900% increase. if the death tax policy in the reid plan were made permanent, over the next ten years, a number of small businesses subject to the death tax would increase from 1,800 to 23,00 and the number of family farms subject to the death tax would increase from 900 to 25,200. those are all -- that's all data put together and those are all data put together and reported out by the joint committee on taxation for. the reason for this massive expansion of the death tax is because $1 million exemption amounts are too low given the value of successful farms and small businesses today. i use my state of south

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